Price for New York-New Jersey rail tunnel rises to $12.9B

FILE - In this April 17, 2014, file photo, backhoes excavate in a hole reserved for a rail tunnel, left, during the early days of construction at the Hudson Yards redevelopment site on Manhattan's west side in New York. A concrete box was planned inside the project to preserve space for a tunnel from Newark to New York City that would allow it to double rail capacity across the Hudson River. An environmental study has been released for the Hudson River rail tunnel project, amid concerns the effort could lose key federal funding under President Donald Trump's proposed budget. (AP Photo/Bebeto Matthews, File)
(Copyright 2017 The Associated Press. All rights reserved.)

NEW YORK – A project to build a new rail tunnel between New York and New Jersey has a new, higher price tag — and continued questions over who will pay for it.

The interim head of the development corporation formed to oversee the massive undertaking, John Porcari, said on Thursday the project will cost $12.9 billion, up from previous estimates of $7 billion to $10 billion. Porcari also announced the release of a preliminary environmental impact statement for the project.

The cost includes $11.2 billion to build a new two-track tunnel and $1.7 billion to overhaul the existing century-old two-track tunnel, which suffered saltwater damage during Superstorm Sandy in 2012. Amtrak has said the two tubes in the existing tunnel may have to be taken out of service, in sequence, within the next 10 to 15 years.

The tunnels, and a new bridge over New Jersey's Hackensack River to replace a century-old span, are the first phase of the Gateway program, an ambitious effort to improve rail capacity on the Northeast Corridor between Washington, D.C., and Boston and specifically around New York's Penn Station, the nation's busiest train station.

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Pedestrians pass a new entrance to the West End Concourse at the Farley Post Office building Thursday, June 15, 2017, in New York. The entrance is part of the first phase of the redevelopment of the historic post office, and initially was scheduled to be opened last year. (AP Photo/Frank Franklin II)
(Copyright 2017 The Associated Press. All rights reserved.)

Under an agreement reached during President Barack Obama's term, New York and New Jersey would split half the cost and the government would contribute the other half. But President Donald Trump's proposed budget recommends changing the terms of a key grant program, a move that, if adopted, could drastically cut funding.

To date, the project has benefited from a streamlined environmental process authorized under Obama. Porcari said Thursday that after public hearings this summer he expects a final environmental statement to be done by next spring, in about half the time the process normally would take.

Preliminary construction on the tunnels wouldn't begin until late 2018 and full construction the following year, assuming federal funding is in place, Porcari said.

"Any delay in putting together that partnership can translate into a delay for the opening date," he said. "We have tried to minimize that by doing things like accelerating the environmental impact statement. But it's clear we need to make sure we're working together with our federal partners on the project."

He said the project "simply doesn't go forward without a federal funding component."

Through a spokeswoman, the U.S. Department of Transportation said, "It will be the responsibility of the project sponsors to identify their funding sources and plan."

Last month, Republican New Jersey Gov. Chris Christie said after a conversation with Transportation Secretary Elaine Chao that he felt confident the two states and the federal government would partner to ensure the project won't be delayed.

The Northeast Corridor around Penn Station has been beset by problems in the last few months. Two derailments, a power failure, signal problems and other issues at Penn Station have pushed Amtrak to begin replacing aging tracks and other equipment that have caused numerous delays for commuters.